Feds charge 7 in Internet ad-fraud case

A crew of Internet bandits devised an international scheme to hijack more than 4 million computers worldwide so that users visiting Netflix, the Internal Revenue Service and other popular websites would be rerouted to sites that generated at least $14 million in fraudulent profits, an indictment unsealed in New York alleged Wednesday.

The indictment says 500,000 computers in the United States were infected, including some used by educational institutions, nonprofits and government agencies like NASA.

Seven people — described as Estonian and Russian nationals — were named in the indictment. It was unclear if they were in custody.

Federal prosecutors in Manhattan were to provide more details at a news conference later Wednesday.

The defendants “engaged in a massive and sophisticated scheme that infected at least 4 million computers located in over 100 countries with malicious software or malware,” the indictment said. “Without the computer users’ knowledge or permission, the malware digitally hijacked the infected computers to facilitate the fraud.”

Searches done on infected computers would be redirected to websites set up by the defendants to generate payments any time a user clicked on an advertisement, the indictment said. The doctored websites mimicked legitimate sites for Netflix, the IRS, ESPN, Amazon and others, it added.

The indictment estimated the defendants “reaped least $14 million in ill-gotten gains.”